Wednesday, December 22, 2010

AUSTRALIA: CATHOLIC SCHOOLS IN MAJOR DEBT

CATH NEWS REPORT; Four Catholic schools face months of disruption after the collapse of a builder with debts of up to $4 million, leaving 80 sub-contractors in financial difficulties, reports The Australian.

The company, Project Kendall Pty Ltd, was expected to be placed into liquidation amid suggestions by the administrator that the company may have been insolvent at the time that lead contractor Bovis Lend Lease awarded it contracts for BER projects at the schools in upmarket Sydney suburbs.

A spokesman for the NSW Catholic Education Commission said the Rose Bay, Bondi and Leichhardt projects had been completed but those at Woollahra, Paddington, Marrickville and Rockdale were still in progress and could face delays of up to six months.

The Construction Forestry Mining and Energy Union is negotiating directly with Bovis to obtain payments for the sub-contractors, who fear a liquidation of Project Kendall may not produce any return to creditors.

The collapse has raised questions about the due diligence of companies working on the BER. One creditor, Jean-Paul Aghabi, who runs ECM Engineering and is owed more than $1m by Project Kendall, said he had taken comfort in Bovis's pre-qualification process for BER projects, which included a financial assessment.

The furore is the latest to mar the BER, which has been plagued by cost over-runs, delays and complaints over lack of consultation with school communities.

Bovis Lend Lease and the NSW Catholic Education Commission both defended the due diligence processes in relation to work on BER projects.